Mises Institutehttps://mises.org/feed/rss.xml
enMises University: The Greatest Week of the Year https://mises.org/40917
<p>This past July, I had the privilege of attending Mises University, also known as &quot;the greatest week of the year.&quot; It was, without a doubt, one of the best weeks of my life so far. Throughout the program I had numerous opportunities to learn from and engage not only with some of the most accomplished and intellectually exciting faculty, but with over 100 students from all over the world equally excited about equipping themselves with knowledge in order to fight for a better future.</p><p class="text-center"><a href="https://mises.org/dailyfall17" target="_blank"><img src="https://mises.org/sites/default/files/Donate%20Button_Article_2017.png" /></a></p><p>When looking around the world today, it is easy to become discouraged at the state of higher learning. Student protesters break up classes and disrupt speakers, having determined that the free exchange of ideas is a form of patriarchal capitalist oppression that has to go. When class is able to proceed uninterrupted, all too often professors merely serve as parrots for the status quo who promote more government interference in all aspects of life and many times punish those with dissenting opinions. With such a sad state of affairs, programs like Mises University are more important than ever in keeping alive the classical liberal and Austrian traditions and equipping students with the tools and knowledge needed to combat the seemingly ever-ascendant forces of antiliberalism.</p><p>As any student will tell you, many college classrooms are filled with half-asleep students who merely show up to get a passing grade and a diploma with their name on it. These are not the kind of students one finds at Mises University. In contrast, everyone I met at Mises University was eager and excited for the opportunity to learn and engage with new and exciting ideas, even if they didn&rsquo;t fit on &ldquo;the index card of allowable opinion&rdquo; that is normal fare at college. My interesting conversations started when I woke up in the morning and didn&rsquo;t stop until I went to bed late at night. How different from the typical college experience!</p><p>As someone who is passionate about a free society and the ideas and institutions that form its foundations, it can often be discouraging to look at the state of the world. However, I left Mises University feeling mentally and spiritually refreshed, with a better understanding of sound economic principles that are at the core of what makes peaceful coexistence and human flourishing possible. Mises wrote that &ldquo;antiliberalism is heading toward a general collapse of civilization&rdquo; and described the efforts to prevent this as &ldquo;the great historical struggle, the decisive battle into which our epoch has plunged us&rdquo; into which everyone is drawn. My time at Mises University made me much better intellectually equipped to understand and carry on this struggle, and I am forever grateful to the Mises Institute and the donors who sponsored my attendance.</p><p class="text-center"><a href="https://mises.org/dailyfall17" target="_blank"><img src="https://mises.org/sites/default/files/Donate%20Button_Article_2017.png" /></a></p>
Zachary Yost 40917Busting Myths About the State and the Libertarian Alternativehttps://mises.org/40738
<p>In non-technical terms, the libertarian is simply someone who is against the use of force against peaceful people in civil society. You would think that this would be a universally accepted idea but, as will be discussed in greater depth in this paper, to believe in government as we know it is to be at odds with this idea.</p>
August 14, 2017Zack Rofer40738The Law Of Powerhttps://mises.org/39640
<p>From the author&#39;s introduction:</p><blockquote><p>The people of the world stand under the principle of power. The whole social entity is governed by power, this being the highest value peoples aspire to and by which they counted, weighed, and judged. But, contrary to what is usually assumed, it is not external power which determines everything, but fundamentally internal power is the core of the power phenomenon. As this core gradually matures over time, it bursts open the shell of external power under whose protection it grows to maturity.</p></blockquote>
January 30, 2017Friedrich von Wieser39640The Mises Reader Unabridgedhttps://mises.org/39438
<p><strong><a href="https://mises.org/library/mises-reader"><em>The Mises Reader</em></a> can be found here.</strong></p><p><em>From the Introduction by Shawn Ritenour ...</em></p><p>During my time in college, while I was still working through <em>Human Action</em>, I sought out other more accessible books by Mises. This was years before the advent of the internet and mises.org. I had to turn to that ancient institution called the library and I discovered that our college library had a collection of shorter essays by Mises published by Libertarian Press in a collection entitled <em>Planning for Freedom and Sixteen Other Essays</em>. This book proved to be a more accessible introduction to Mises&rsquo;s thought. I began reading it during my free time and did not stop until I had come to the end. <em>Planning for Freedom</em> turned out to be the first book by Mises that I read completely. As I read, I began to put together an economic and political philosophy that revolved around private property. It was the writings of Mises that provided me the intellectual foundation to evaluate and integrate what I was being taught in school. Looking back on those years, I have grown to appreciate the wisdom expressed in the sentiment by Mark Thornton that one of the best ways to become introduced to the work of Ludwig von Mises is through some of his shorter, more popular works. While sacrificing nothing in the way of sound economic theory, they are more accessible and in any event are not as intimidating as Mises&rsquo;s 881-page <em>magnum opus</em>.</p><p>In <em>The Mises Reader</em>, I have sought to bring you the best of both worlds. An attempt has been made to acquaint the reader with the broad spectrum of Mises&rsquo;s ideas and analyses in a way that is more accessible and less daunting. The selections include, therefore, several shorter, more popular works side-by-side with excerpts from longer, more scholarly and technically difficult works. It is my hope that this book will provide a user-friendly gateway into the brilliance of Mises, because we desperately need his wisdom as much now as in any other time in our history.</p><p>The work of Ludwig von Mises is an important guide for thoughtful citizens because he strongly, yet matter-of-factly sets forth economics as the pursuit of truth. Not the truth of the passing fancy, nor the so-called &ldquo;small t-truth&rdquo; that is always in danger of being refuted by the latest bit of empirical data; but economic truth that will stand for all ages. Misesian economic theory is a triumphant response to the epistemological relativism of today because it is economics developed in light of reality.</p><p>Upon reading the works of Mises, one is immediately set forth on the right road, because Mises begins where economics must begin &mdash; human action. All of his economic theorems and corollaries are deduced from the non-controversial axiom that people engage in purposeful behavior. This immediately sets his theories on intellectual bedrock. ...</p><p>Ludwig von Mises truly was an intellectual giant among men and, as Murray Rothbard saw, his thought and causal-realist framework is the best alternative to the economic paradigm of our age. In the contemporary fog of the modern academy, Mises serves as a lighthouse, warning unsuspecting students of the perils of bad economics and statist economic policies, while illuminating students to the principles of the free society.</p><p>The book in your hands is intended to give a taste of the many facets of Mises&rsquo;s thought in a way that accessibly communicates most of his key contributions to the social sciences. It therefore includes excerpts from his larger and more technically demanding works side-by-side with shorter, more introductory articles and lectures. The finished product is sort of an intelligent person&rsquo;s guide to the work of Ludwig von Mises. It is especially suitable for those with an interest in Mises, but find jumping right into <em>Human Action</em>, <em>Socialism</em>, or <em>The Theory of Money and Credit</em> rather daunting. The hope is to give the reader a survey of Mises&rsquo;s insights in a format that nourishes his intellectual soul, while also whetting the appetite for his larger corpus of work. <strong>Those not quite ready to dive deeply into Misesian waters may wish to pick up <a href="https://mises.org/library/mises-reader" target="_blank"><em>The Mises Reader</em></a>, an&nbsp;abridged version of this volume.</strong> It is hoped that together these two volumes will foster a rising generation of citizens more thoroughly acquainted with sound economics and the principles of the free society. ...</p>
December 22, 2016Shawn Ritenour39438The Mises Readerhttps://mises.org/39406
<p><strong>Shawn Ritenour and Tom Woods discuss <em><a href="https://mises.org/blog/tom-woods-and-shawn-ritenour-discuss-mises-reader">The Mises Reader here</a>.</em></strong></p><p><strong><a href="https://mises.org/library/mises-reader-unabridged"><em>The Mises Reader Unabridged</em></a> edition can be found here.</strong></p><p><em>From the Introduction by Shawn Ritenour ...</em></p><p>During my time in college, while I was still working through <em>Human Action</em>, I sought out other more accessible books by Mises. This was years before the advent of the internet and mises.org. I had to turn to that ancient institution called the library and I discovered that our college library had a collection of shorter essays by Mises published by Libertarian Press in a collection entitled <em>Planning for Freedom and Sixteen Other Essays</em>. This book proved to be a more accessible introduction to Mises&rsquo;s thought. I began reading it during my free time and did not stop until I had come to the end. <em>Planning for Freedom</em> turned out to be the first book by Mises that I read completely. As I read, I began to put together an economic and political philosophy that revolved around private property. It was the writings of Mises that provided me the intellectual foundation to evaluate and integrate what I was being taught in school. Looking back on those years, I have grown to appreciate the wisdom expressed in the sentiment by Mark Thornton that one of the best ways to become introduced to the work of Ludwig von Mises is through some of his shorter, more popular works. While sacrificing nothing in the way of sound economic theory, they are more accessible and in any event are not as intimidating as Mises&rsquo;s 881-page <em>magnum opus</em>.</p><p>In <em>The Mises Reader</em>, I have sought to bring you the best of both worlds. An attempt has been made to acquaint the reader with the broad spectrum of Mises&rsquo;s ideas and analyses in a way that is more accessible and less daunting. The selections include, therefore, several shorter, more popular works side-by-side with excerpts from longer, more scholarly and technically difficult works. It is my hope that this book will provide a user-friendly gateway into the brilliance of Mises, because we desperately need his wisdom as much now as in any other time in our history.</p><p>The work of Ludwig von Mises is an important guide for thoughtful citizens because he strongly, yet matter-of-factly sets forth economics as the pursuit of truth. Not the truth of the passing fancy, nor the so-called &ldquo;small t-truth&rdquo; that is always in danger of being refuted by the latest bit of empirical data; but economic truth that will stand for all ages. Misesian economic theory is a triumphant response to the epistemological relativism of today because it is economics developed in light of reality.</p><p>Upon reading the works of Mises, one is immediately set forth on the right road, because Mises begins where economics must begin &mdash; human action. All of his economic theorems and corollaries are deduced from the non-controversial axiom that people engage in purposeful behavior. This immediately sets his theories on intellectual bedrock. ...</p><p>Ludwig von Mises truly was an intellectual giant among men and, as Murray Rothbard saw, his thought and causal-realist framework is the best alternative to the economic paradigm of our age. In the contemporary fog of the modern academy, Mises serves as a lighthouse, warning unsuspecting students of the perils of bad economics and statist economic policies, while illuminating students to the principles of the free society.</p><p><em>The Mises Reader</em> is intended to give a taste of the many facets of Mises&rsquo;s thought in a way that accessibly communicates most of his key contributions to the social sciences. It therefore includes excerpts from his larger and more technically demanding works side-by-side with shorter, more introductory articles and lectures. The finished product is sort of an intelligent person&rsquo;s guide to the work of Ludwig von Mises. It is especially suitable for those with an interest in Mises, but find jumping right into <em>Human Action</em>, <em>Socialism</em>, or <em>The Theory of Money and Credit</em> rather daunting. The hope is to give the reader a survey of Mises&rsquo;s insights in a format that nourishes his intellectual soul, while also whetting the appetite for his larger corpus of work. <strong>Those ready to dive into deeper Misesian waters are encouraged to pick up <a href="https://mises.org/library/mises-reader-unabridged" target="_blank"><em>The Mises Reader Unabridged</em></a> which contains all of the material in <em>The Mises Reader</em> plus over 125 pages of additional material, primarily from his more scholarly works.</strong> It is hoped that together these two volumes will foster a rising generation of citizens more thoroughly acquainted with sound economics and the principles of the free society. ...</p>
December 20, 2016Shawn Ritenour39406Water Capitalism: The Case for Privatizing Oceans, Rivers, Lakes, and Aquifershttps://mises.org/39255
<p>Water covers some 75 percent of the earth&rsquo;s surface, while land covers 25 percent, approximately. Yet the former accounts for less than 1 percent of world GDP, the latter 99 percent plus. Part of the reason for this imbalance is that there are more people located on land than water. But a more important explanation is that while land is privately owned, water is unowned (with the exception of a few small lakes and ponds), or governmentally owned (rivers, large lakes). This gives rise to the tragedy of the commons: when something is unowned, people have less of an incentive to care for it, preserve it, and protect it, than when they own it. As a result we have oil spills, depletion of fish stocks, threatened extinction of some species (e.g., whales), shark attacks, polluted and dried-up rivers, misallocated water, unsafe boating, piracy, and other indices of economic disarray which, if they had occurred on the land, would have been more easily identified as the result of the tragedy of the commons and/or government ownership and mismanagement. The purpose of this book is to make the case for privatization of all bodies of water, without exception. In the tragic example of the Soviet Union, the 97 percent of the land owned by the state accounted for 75 percent of the crops. On the 3 percent of the land privately owned, 25 percent of the crops were grown. The obvious mandate requires that we privatize the land, and prosper. The present volume applies this lesson, in detail, to bodies of water.</p>
November 14, 2016Walter Block, Peter Lothian Nelson39255Never a Dull Momenthttps://mises.org/38677
<p>[<em>From the Introduction by Justin Raimondo</em>.]</p><p>Murray Rothbard was a true polymath. He wasn&rsquo;t just the number one theoretician of the modern libertarian movement &mdash; author of the monumental <a href="https://mises.org/library/man-economy-and-state-power-and-market"><em>Man, Economy, and State</em></a>; <a href="https://mises.org/library/conceived-liberty-2"><em>Conceived in Liberty</em></a>, a four-volume history of the American Revolution; the two-volume <a href="https://mises.org/library/austrian-perspective-history-economic-thought"><em>An Austrian Perspective on the History of Economic Thought</em></a>; and essays too numerous to list &mdash; he was also its most tireless publicist, at least in its early days.</p><p>He didn&rsquo;t live in an ivory tower: far from it. As he wrote in a 178-page memo entitled &ldquo;Strategy For Libertarian Social Change&rdquo;:</p><blockquote><p>If the advancement of liberty requires a movement as well as a body of ideas, it is our contention that the overriding goal of a libertarian movement must be the <em>victory of liberty</em> in the real world, the bringing of the ideal into actuality. [Emphasis in original]<a class="see-footnote" id="footnoteref1_q4t7w64" title="&ldquo;Strategy for Libertarian Social Change,&rdquo; unpublished manuscript, 1978." href="#footnote1_q4t7w64">1</a></p></blockquote><p>For Rothbard, libertarianism wasn&rsquo;t an intellectual parlor game, nor was it a personal affectation: for him, it was a banner that was meant to be carried into battle. Ever the happy warrior, he sought to bring the radical libertarian perspective to bear on the events of the day, and it was a task he delighted in. While he tended to write his more serious books and articles in the dead of night, staying up at all hours pounding away on his old-fashioned (even for the time) typewriter, his &ldquo;mornings&rdquo; (noonish) were devoted to relatively lighter fare &mdash; the polemical journalism which, over the years, found various outlets. In the 1940s he wrote a personal newsletter, <em>The Vigil</em>, which was typewritten and mailed to his closest friends and associates. Later on, he was appointed &ldquo;Washington Correspondent&rdquo; for <em>Christian Economics</em> magazine, a publication put out by a group known as Spiritual Mobilization, headed up by the Rev. James Fifield, and devoted to economic laissez-faire.</p><p>This lasted a few years but eventually he was let go: the right-wing Protestant pastors who were the main audience of <em>Christian Economics</em> were appalled by his anti-interventionist polemics when it came to the foreign policy issue. As the cold war got colder there was less tolerance for the &ldquo;isolationism&rdquo; of the Old Right, which by that time was largely forgotten by the conservative rank-and-file. Those rightist ministers thought he was a Communist! So there was a parting of the ways.</p><p>His sojourn as an occasional writer for William F. Buckley, Jr.&rsquo;s <em>National Review</em> was even briefer, as Rothbard&rsquo;s patience with the warmongering that emanated like a radioactive cloud from that publication soon wore thin. The Buckleyites&rsquo; crazed desire for a nuclear showdown with Moscow was a bit too much for the old &ldquo;isolationist&rdquo; to take, and his refusal to show enthusiasm for World War III soon led to his excommunication from a church to which he had never properly belonged.</p><p>But no matter: the hegemony of cold war ideology was about to receive a serious challenge, as the 1960s dawned. An independent libertarian movement &mdash; organizationally separate as well as ideologically differentiated from <em>National Review</em>-style conservatism &mdash; was about to make its debut, in large part due to Rothbard&rsquo;s efforts. He and Leonard Liggio had started <em>Left &amp; Right</em>, a magazine directed at the burgeoning New Left movement, which was beginning to make waves, starting on the campus of the University of California at Berkeley. However, the magazine was a quarterly, not a good format for someone who wanted to comment on current events, and so when Robert Lefevre of the Freedom School contacted him to write a syndicated newspaper column for the School&rsquo;s <em>Pine Tree Features</em>, Rothbard eagerly took up the task.</p><p>These short columns &mdash; usually no more than two typewritten pages each &mdash; appeared in the Freedom Newspapers, a chain owned by R.C. Hoiles, who was a devotee of Lefevre&rsquo;s and a committed libertarian. Starting in January of 1967, Rothbard churned out fifty-eight columns, the last one written in the summer of 1968, addressing the campus revolt; the massive antiwar demonstrations; the Six-Day War between Israel and the Arab powers; the Newark riots; the Vietnam war; the persecution of H. Rap Brown, the assassination of Martin Luther King, the abdication of Lyndon Baines Johnson, the rise of Richard Nixon &mdash; in those two crucial years there was, as they say, never a dull moment.</p><p>We might call this Rothbard&rsquo;s &ldquo;left&rdquo; period: he sided with the student protestors, the African-Americans fighting cops who had invaded their neighborhoods; he stood with the Vietnamese people against the American soldiers who had invaded <em>their</em> neighborhood; he&nbsp; stood with the Palestinians against their Israeli conquerors, he valorized the &ldquo;heroic&rdquo; Malcolm X and denounced Martin Luther King for calling for federal troops to put down black &ldquo;rioters&rdquo; &mdash; but he never pandered to his intended audience. Unlike some of the &ldquo;left-libertarians&rdquo; of today, who have adopted the politically correct check-your-privilege jargon of white liberalism, he always addressed the issues in straightforward libertarian terms.</p><p>This bluntness is apparent in the very first column, written sometime in January of 1967, cheering the firing of University of California chancellor Clark Kerr, and praising Mario Savio &mdash; who had the honesty to say &ldquo;Good riddance to bad rubbish&rdquo; &mdash; while some New Leftists rushed to defend him. He wondered why conservatives, who had formerly been critics of the educational bureaucracy, didn&rsquo;t side with the student rebels who were rising up against &ldquo;this educational Moloch&rdquo; instead of attacking them for &ldquo;their tastes in clothes and hair styling.&rdquo; Yet the students weren&rsquo;t let off easy, either: instead of protesting Governor Ronald Reagan&rsquo;s threatened cuts to the state university system&rsquo;s budgets, he wrote, they should be cheering and demanding yet <em>more</em> cuts because this &ldquo;acted to reduce the very gigantic university system that the students have properly denounced.&rdquo; So, the New Leftists wanted &ldquo;self-determination&rdquo; &mdash; or, to put it in the New Age-y terminology of the time, &ldquo;self-actualization&rdquo; &mdash; as opposed to subservience to a soul-less pedagogical Leviathan? Well, then, &ldquo;shifting the burden of payment to the student himself will give the student-consumer far more power over their own education&rdquo; than under the wrong-headed &ldquo;free tuition&rdquo; regime.</p><p>Rothbard didn&rsquo;t pander: he didn&rsquo;t try to imitate the rhetoric of the students, he didn&rsquo;t insult them by trying to make them think he was &ldquo;cool&rdquo;: Rothbard was strictly Old School, and never pretended otherwise. What he did was apply libertarian principles to the concrete day-to-day issues that rose up in those two tumultuous years, revealing the radical evil of the State and the unadorned radicalism of the libertarian stance in every case.</p><p>He didn&rsquo;t pretend to be a leftist: the idea was to win over the left-leaning students, and the revolutionary blacks, to libertarianism, not to masquerade in the fashionable rhetoric of the moment. He never disguised or watered down his libertarianism to suit his audience: unlike the self-styled &ldquo;left-libertarians&rdquo; of today, he rejected any modification or &ldquo;addition&rdquo; to the central axiom of libertarian political theory, which is the nonaggression principle plain and simple. In answer to the &ldquo;check your privilege&rdquo; sloganeering of the cultural left, Rothbard would have said &ldquo;Check your cultural prejudices at the door.&rdquo;</p><p>Although himself a traditionalist, Rothbard always maintained that there could be no such thing as a &ldquo;libertarian&rdquo; culture: those who wanted to &ldquo;live liberty&rdquo; were living under a delusion, namely the entirely false idea that some particular &ldquo;lifestyle&rdquo; could be derived from the central axioms of what is only a political philosophy and not a &ldquo;way of life.&rdquo; He had, after all, been badly burned by the cultural totalitarianism of the &ldquo;Objectivist&rdquo; cult around novelist Ayn Rand, which had a &ldquo;party line&rdquo; on every subject under the sun, including music (Rachmaninoff good, Mozart bad) and even physics. The libertarian movement, or at least a substantial portion of it, had been down that road before, and found it to be a dead end.&nbsp;</p><p>To the younger readers of this volume, Rothbard&rsquo;s writings from the 1960s may seem like a recounting of ancient history, and only tangentially relevant to the world we live in today. That this is not so is underscored by one of his more prescient pieces: in &ldquo;The Coming American Fascism&rdquo; Rothbard comments on various acts of retaliation against critics of the Vietnam war and writes: &ldquo;At home we have the fascist corporate state economy: an economy of monopolies, subsidies, privileges runs by a tripartite coalition of Big Business, Big Unions, and Big Government.&rdquo; While &ldquo;[i]n foreign affairs we have expanded all over the globe, grabbing bases and running governments everywhere, all in the name of a global crusade against the &lsquo;international Communist conspiracy&rsquo;.&rdquo;</p><p>Substitute &ldquo;international terrorist conspiracy&rdquo; for that last phrase and we have a snapshot of the future &mdash; the one we are living in today.</p><p class="text-center"><a href="https://mises.org/giving/campaigns/mises-daily" target="_blank"><img src="https://mises.org/sites/default/files/Donate%20Button%2020160722%20v2c_email.png" /></a></p>
<ul class="footnotes"><li class="footnote" id="footnote1_q4t7w64"><a class="footnote-label" href="#footnoteref1_q4t7w64">1.</a> &ldquo;Strategy for Libertarian Social Change,&rdquo; unpublished manuscript, 1978.</li>
</ul>
August 2, 2016Murray N. Rothbard38677Suicide Pact:The Radical Expansion of Presidential Powers and the Lethal Threat to American Libertyhttps://mises.org/38562
<p>In <em>Suicide Pact</em>, Judge Andrew P. Napolitano details a long, sordid history of governmental&mdash;and especially presidential&mdash;encroachments on liberty, enacted in the name of protecting America but which serve instead to undermine national security and erode the nation&rsquo;s founding freedoms.</p><p>Appealing to all politically aware Americans but especially to highly engaged conservatives and libertarians (including his 576,000 Facebook fans and 240,000 Twitter followers), Napolitano&rsquo;s sobering-yet-patriotic perspective unmasks rampant political doubletalk and Washington power plays by taking a clear, legally grounded look at how we got here.</p><p>Blending fascinating history with fresh reporting and analysis on contemporary issues such as drone warfare and executions, NSA surveillance, and secret federal courts, <em>Suicide Pact</em> casts a vision beyond hollow rhetoric to common-sense solutions for returning sanity to our shores.</p>
July 18, 2016Judge Andrew P. Napolitano38562The Rothbard Readerhttps://mises.org/37615
<p><em>From the Introduction by Joseph T. Salerno and Matthew McCaffrey.</em></p><p>Few economists manage to produce a body of work that boasts a serious following twenty years after their deaths. Murray N. Rothbard is a rare exception. More than two decades since his passing, his influence lives on, both in the work of a new generation of social scientists, and among a growing number of the general public.</p><p>One reason for Rothbard&rsquo;s continuing popularity is his ability to reach across disciplines, and to connect them: unlike many contemporary economists, who specialize in increasingly narrow fields within the science, Rothbard&rsquo;s research agenda was expansive and interdisciplinary, covering most of the social sciences and humanities.</p><p>Some readers of this book will already be familiar with Rothbard&rsquo;s major works, such as his path-breaking treatise on economics, <em>Man, Economy, and State</em>. Yet Rothbard also produced hundreds of shorter works for both academic and popular audiences. Unfortunately, many lack the time to explore his writings; what&rsquo;s more, his <em>oeuvre</em> is so enormous it is often difficult to know where to begin.</p><p>This book aims to solve these problems by providing a window into Rothbard&rsquo;s achievements in the social sciences, humanities, and beyond. It includes introductory, intermediate, and advanced material, to ensure the book can be enjoyed by readers of all levels of understanding and familiarity with Rothbard&rsquo;s work. Therefore although it is intended primarily for newcomers, veteran readers will also find much to discover or re-discover in these pages.</p>
March 2, 2016Joseph T. Salerno, Matthew McCaffrey37615A Genuine Gold Dollar vs. the Federal Reservehttps://mises.org/37373
<h2>A Genuine Gold Dollar</h2><p>In recent years an increasing number of economists have understandably become disillusioned by the inflationary record of fiat currencies. They have therefore concluded that leaving the government and its central bank power to fine tune the money supply, but abjuring them to use that power wisely in accordance with various rules, is simply leaving the fox in charge of the proverbial henhouse. They have come to the conclusion that only radical measures can remedy the problem, in essence the problem of the inherent tendency of government to inflate a money supply that it monopolizes and creates. That remedy is no less than the strict separation of money and its supply from the state.</p><p>The best known proposal to separate money from the state is that of F.A. Hayek and his followers. Hayek&rsquo;s &ldquo;denationalization of money&rdquo; would eliminate legal tender laws, and allow every individual and organization to issue its own currency, as paper tickets with its own names and marks attached. The central government would retain its monopoly over the dollar, or franc, but other institutions would be allowed to compete in the money creation business by offering their own brand name currencies.</p><p>Thus, Hayek would be able to print Hayeks, the present author to issue Rothbards, and so on. Mixed in with Hayek&rsquo;s suggested legal change is an entrepreneurial scheme by which a Hayek-inspired bank would issue &ldquo;ducats,&rdquo; which would be issued in such a way as to keep prices in terms of ducats constant. Hayek is confident that his ducat would easily outcompete the inflated dollar, pound, mark, or whatever.</p><p>Hayek&rsquo;s plan would have merit if the thing &mdash; the commodity &mdash; we call &ldquo;money&rdquo; were similar to all other goods and services. One way, for example, to get rid of the inefficient, backward, and sometimes despotic US Postal Service is simply to abolish it; but other free-market advocates propose the less radical plan of keeping the post office intact but allowing any and all organizations to compete with it. These economists are confident that private firms would soon be able to outcompete the post office. In the past decade, economists have become more sympathetic to deregulation and free competition, so that superficially denationalizing or allowing free competition in currencies would seem viable in analogy with postal services or fire-fighting or private schools.</p><p>There is a crucial difference, however, between money and all other goods and services. All other goods, whether they be postal services or candy bars or personal computers, are desired for their own sake, for the utility and value that they yield to consumers.</p><p>Consumers are therefore able to weigh these utilities against one another on their own personal scales of value. Money, however, is desired not for its own sake, but precisely because it already functions as money, so that everyone is confident that the money commodity will be readily accepted by any and all in exchange. People eagerly accept paper tickets marked &ldquo;dollars&rdquo; not for their aesthetic value, but because they are sure that they will be able to sell those tickets for the goods and services they desire. They can only be sure in that way when the particular name, &ldquo;dollar,&rdquo; is already in use as money.</p><p>Hayek is surely correct that a free-market economy and a devotion to the right of private property requires that everyone be permitted to issue whatever proposed currency names and tickets they wish. Hayek should be free to issue Hayeks or ducats, and I to issue Rothbards or whatever. But issuance and <em>acceptance</em> are two very different matters. No one will accept new currency tickets, as they well might new postal organizations or new computers. These names will not be chosen as currencies precisely because they have not been used as money, or for any other purpose, before.</p><p>One crucial problem with the Hayekian ducat, then, is that no one will take it. New names on tickets cannot hope to compete with dollars or pounds which originated as units of weight of gold or silver and have now been used for centuries on the market as the currency unit, the medium of exchange, and the instrument of monetary calculation and reckoning.</p><p>Hayek&rsquo;s plan for the denationalization of money is Utopian in the worst sense: not because it is radical, but because it would not and could not work. Print different names on paper all one wishes, and these new tickets still would not be accepted or function as money; the dollar (or pound or mark) would still reign unchecked. Even the removal of the legal tender privilege would not work, for the new names would not have emerged out of useful commodities on the free market, as the regression theorem demonstrates they must. And since the government&rsquo;s own currency, the dollar and the like, would continue to reign unchallenged as money, money would not have been denationalized at all. Money would still be nationalized and a creature of the state; there would still be no separation of money and the state. In short, even though hopelessly Utopian, the Hayek plan would scarcely be radical enough, since the current inflationary and state-run system would be left intact.</p><p>Even the variant on Hayek whereby private citizens or firms issue gold coins denominated in grams or ounces would not work, and this is true even though the dollar and other fiat currencies originated centuries ago as names of units of weight of gold or silver. Americans have been used to using and reckoning in &ldquo;dollars&rdquo; for two centuries, and they will cling to the dollar for the foreseeable future. They will simply not shift away from the dollar to the gold ounce or gram as a currency unit. People will cling doggedly to their customary names for currency; even during runaway inflation and virtual destruction of the currency, the German people clung to the &ldquo;mark&rdquo; in 1923 and the Chinese to the &ldquo;yen&rdquo; in the 1940s. Even drastic revaluations of the runaway currencies which helped end the inflation kept the original &ldquo;mark&rdquo; or other currency name.</p><p>If people love and will cling to their dollars or francs, then there is only one way to separate money from the state, to truly denationalize a nation&rsquo;s money. And that is to denationalize the dollar (or the mark or franc) itself. Only privatization of the dollar can end the government&rsquo;s inflationary dominance of the nation&rsquo;s money supply.</p><p>How, then, can the dollar be privatized or denationalized? Obviously not by making counterfeiting legal. There is only one way: to link the dollar once again to a useful market commodity. Only by changing the definition of the dollar from fiat paper tickets issued by the government to a unit of weight of some market commodity, can the function of issuing money be permanently and totally shifted from government to private hands.</p><p>If it is imperative that the dollar be defined once again as a weight of a market commodity, then what commodity (or commodities) should it be defined as, and what should be the particular weight in which it is set? In reply, I propose that the dollar be defined as a weight of a single commodity, and that that commodity be gold.</p><p>Many economists, beginning with Irving Fisher at the turn of the twentieth century, and including Benjamin Graham and an earlier F.A. Hayek, have hankered after some form of &ldquo;commodity dollar,&rdquo; in which the dollar is defined, not as a weight of a single commodity, but in terms of a &ldquo;market basket&rdquo; of two or many more commodities.</p><p>There are many deep-seated flaws in this approach. In the first place, such a market-basket currency has never emerged spontaneously from the workings of the market. It would have to be imposed (to use a derogatory term from Hayek himself) as a &ldquo;constructivist&rdquo; scheme from the top, from government to be inflicted upon the market.</p><p>Second, and as a corollary, the government would be obviously in charge, since a market-basket currency does not, unlike the use of units of weight in exchange, arise from the free market itself. The government could and would, then, alter the ratios of weights, adjust the various fixed terms, and so forth.</p><p>Third, the hankering for a fixed market basket is an out-growth of a strong desire for the government to regulate the economy so as to keep the &ldquo;price level&rdquo; constant. As we have seen, the natural tendency of the free market is to lower prices over time, in accordance with growing productivity and increased supplies of goods. There is no good reason for the government to interfere. Indeed, if it does so, it can only create a boom-and-bust business cycle by expanding credit to keep prices artificially higher than they would be on the free market.</p><p>Furthermore, there are other grave problems with the commodity-basket approach. There is, for one thing, no such unitary entity as &ldquo;the price level&rdquo; which would be kept constant. The entire concept of price level is an artificial construction masking the fact that it can only consist of individual prices, each varying continually in relation to each other.</p><p>Irving Fisher&rsquo;s intense desire for a constant price level stemmed from his own fallacious philosophic notion that, just as science is based upon measurable standards (such as a yard comprising 36 inches), so money is supposed to be a measure of values and prices. But since there is no single price level, his very idea, far from being scientific, is a hopeless chimera. The only scientific measurement that properly applies is the currency unit as a true measure of weight of the money commodity. Furthermore, the only scientific measure is a definition which, once selected, remains eternally the same: &ldquo;the pound,&rdquo; or &ldquo;the yard.&rdquo;</p><p>Juggling definitions of weight within a market basket violates any proper concept of definition or of measure. A final and vital flaw in a market-basket dollar is that Gresham&rsquo;s law would result in perpetual shortages and surpluses of different commodities within the market basket. Gresham&rsquo;s law states that any money overvalued by the government (in relation to its market value) will drive out of circulation money undervalued by the government. In short, control of exchange rates has consequences like any other price control: A maximum rate below the free market causes a shortage; a minimum rate set above the market will cause a surplus.</p><p>From the origin of the United States, the currency was in continuing trouble because the United States was on a bimetallic rather than a gold standard, in short a market basket of two commodities, gold and silver. As is well known, the system never worked, because at one time or another, one or the other precious metal was above or below its world market valuations, and hence one or the other coin or bullion was flowing into the country while the other would disappear. In 1873 partisans of the monometallic gold standard, seeing that silver was soon to be overvalued and hence on the point of driving out gold, put the United States on a virtual single gold standard, a system that was ratified officially in 1900.</p><p>We conclude, then, that the dollar must be redefined in terms of a single commodity, rather than in terms of an artificial market basket of two or more commodities. Which commodity, then, should be chosen? In the first place, precious metals, gold and silver, have always been preferred to all other commodities as mediums of exchange where they have been available. It is no accident that this has been the invariable success story of precious metals, which can be partly explained by their superior stable nonmonetary demand, their high value per unit weight, durability, divisibility cognizability, and the other virtues described at length in the first chapter of all money and banking textbooks published before the US government abandoned the gold standard in 1933.</p><p>Which metal should be the standard, then, silver or gold? There is, indeed, a case for silver, but the weight of argument holds with a return to gold. Silver&rsquo;s increasing relative abundance of supply has depreciated its value badly in terms of gold, and it has not been used as a general monetary metal since the nineteenth century. Gold was the monetary standard in most countries until 1914, or even until the 1930s. Furthermore, gold was the standard when the US government in 1933 confiscated the gold of all American citizens and abandoned gold redeemability of the dollar, supposedly only for the duration of the depression emergency. Still further, gold and not silver is still considered a monetary metal everywhere, and governments and their central banks have managed to amass an enormous amount of gold not now in use, but which again could be used as a standard for the dollar, pound, or mark.</p><p>It is important to realize what a definition of the dollar in terms of gold would entail. The definition must be real and effective rather than nominal. Thus, the US statutes define the dollar as 1/42.22 gold ounce, but this definition is a mere formalistic accounting device. To be real, the definition of the dollar as a unit of weight of gold must imply that the dollar is interchangeable and therefore redeemable by its issuer in that weight, that the dollar is a demand claim for that weight in gold. Furthermore, once selected, the definition, whatever it is, must be fixed permanently. Once chosen, there is no more excuse for changing definitions than there is for altering the length of a standard yard or the weight of a standard pound.</p><h2>Alan Greenspan: A Minority Report</h2><p>The press is resounding with acclaim for the accession to Power of Alan Greenspan as chairman of the Fed; economists from right, left, and center weigh in with hosannas for Alan&rsquo;s greatness, acumen, and unparalleled insights into the &ldquo;numbers.&rdquo; The only reservation seems to be that Alan might not enjoy the enormous power and reverence accorded to his predecessor, for he does not have the height of a basketball player, is not bald, and does not smoke imposing cigars.</p><p>The astute observer might feel that anyone accorded such unanimous applause from the Establishment couldn&rsquo;t be all good, and in this case he would be right on the mark. I knew Alan thirty years ago, and have followed his career with interest ever since.</p><p>I found particularly remarkable the recent statements in the press that Greenspan&rsquo;s economic consulting firm of Townsend-Greenspan might go under, because it turns out that what the firm really sells is not its econometric forecasting models, or its famous numbers, but Greenspan himself, and his gift for saying absolutely nothing at great length and in rococo syntax with no clearcut position of any kind.</p><p>As to his eminence as a forecaster, he ruefully admitted that a pension-fund managing firm he founded a few years ago just folded for lack of ability to apply the forecasting where it counted &mdash; when investment funds were on the line.</p><p>Greenspan&rsquo;s real qualification is that he can be trusted never to rock the establishment&rsquo;s boat. He has long positioned himself in the very middle of the economic spectrum. He is, like most other long-time Republican economists, a conservative Keynesian, which in these days is almost indistinguishable from the liberal Keynesians in the Democratic camp. In fact, his views are virtually the same as Paul Volcker, also a conservative Keynesian. Which means that he wants moderate deficits and tax increases, and will loudly worry about inflation as he pours on increases in the money supply.</p><p>There is one thing, however, that makes Greenspan unique, and that sets him off from his Establishment buddies. And that is that he is a follower of Ayn Rand, and therefore &ldquo;philosophically&rdquo; believes in <em>laissez-faire</em> and even the gold standard. But as the <em>New York Times</em> and other important media hastened to assure us, Alan only believes in laissez-faire &ldquo;on the high philosophical level.&rdquo; In practice, in the policies he advocates, he is a centrist like everyone else because he is a &ldquo;pragmatist.&rdquo;</p><p>As an alleged &ldquo;<em>laissez-faire</em> pragmatist,&rdquo; at no time in his prominent twenty-year career in politics has he ever advocated anything that even remotely smacks of <em>laissez-faire</em>, or even any approach toward it. For Greenspan, <em>laissez-faire</em> is not a lodestar, a standard, and a guide by which to set one&rsquo;s course; instead, it is simply a curiosity kept in the closet, totally divorced from his concrete policy conclusions.</p><p>Thus, Greenspan is only in favor of the gold standard if all conditions are right: if the budget is balanced, trade is free, inflation is licked, everyone has the right philosophy, etc. In the same way, he might say he only favors free trade if all conditions are right: if the budget is balanced, unions are weak, we have a gold standard, the right philosophy, etc. In short, never are one&rsquo;s &ldquo;high philosophical principles&rdquo; applied to one&rsquo;s actions. It becomes almost piquant for the Establishment to have this man in its camp.</p><p>Over the years, Greenspan has, for example, supported President Ford&rsquo;s imbecilic Whip Inflation Now buttons when he was Chairman of the Council of Economic Advisers. Much worse is the fact that this &ldquo;high philosophic&rdquo; adherent of <em>laissez-faire</em> saved the racketeering Social Security program in 1982, just when the general public began to realize that the program was bankrupt and there was a good chance of finally slaughtering this great sacred cow of American politics. Greenspan stepped in as head of a &ldquo;bipartisan&rdquo; (i.e., conservative and liberal centrists) Social Security Commission, and &ldquo;saved&rdquo; the system from bankruptcy by slapping on higher Social Security taxes.</p><p>Alan is a long-time member of the famed Trilateral Commission, the Rockefeller-dominated pinnacle of the financial-political power elite in this country. And as he assumes his post as head of the Fed, he leaves his honored place on the board of directors of J.P. Morgan &amp; Co. and Morgan Guaranty Trust. Yes, the Establishment has good reason to sleep soundly with Greenspan at our monetary helm. And as icing on the cake, they know that Greenspan&rsquo;s &ldquo;philosophical&rdquo; Randianism will undoubtedly fool many free market advocates into thinking that a champion of their cause now perches high in the seats of power.</p>
January 20, 2016Murray N. Rothbard37373